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Cramer 14, Us 11, America 8, Monmouth 8, China 5, Citibank 4, Fha 4, Florida 4, Csc 4, Europe 3, Georgia 3, Pepsico 3, Aflac 3, Ben Bernanke 3, Kohl 3, Devils 2, Siemens 2, Beth 2, Ameritrade 2, Deckers 2,
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  CNBC    Mad Money    News/Business.  (2013) New.  

    February 22, 2013
    6:00 - 7:00pm EST  

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coming up next, cramer has a house warming speck and industrial sized dividend. cramer's game plan for next week. todd gordon, kick it you have a.
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>> offers to sell you're refor next week. >> andy bush. >> two of my favorite things, the oscars and chinese flash pmi. seth mcfarland will be on. he will be great. the smes will probably disappoint for china. the ossi trade may not work out so good. >> i'm with you for the oscars. >> he has a heck of a weekend. i'm going to go with the euro swiss on the british down grade. >> amelia? >> i'm with todd. i like short. the kiwi can't keep a good trade down. >> kathy? i would beware of big bend. if he depends q.e. vigorously, it could kill the dollar rally. >> that's it for us. we'll see you back here next friday at 5:30 eastern only on cnbc. have a great weekend! to my world.
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>> you need to get in the game. >> firms are going to go out of business, and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. >> "mad money." you can't afford to miss it. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. just trying to save you a little money. my job is not just to entertain you but to educate you so call me, 1-800-743-cnbc. after today's beautiful rally the dow gaining 120 points, the s&p climbing .88%, nasdaq falling .97%, really knocking the socks off the panicers, worriers, and short sellers everywhere, let's cut right to the chase and go into next week's game plan. it's clear now the most significant reason for the huge decline we experienced over this week the one where people came out of the woodwork to pronounce the bull slaughtered and the bear roaring back to prominence was the release of month-old, emphasis month-old fed meetings. now, next tuesday at 10:00 a.m.,
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very, have i big, we find out how dated those minutes were when fed chief ben bernanke speaks in front of the senate. nothing next week compares to this speech in its importance because if this market's going to avoid having another bear morning like we had on wednesday and thursday bernanke has to say that the fed sees the hazards of sequestration, he recognizes the spike in gasoline and the hurt the consumer might be feeling as she adjusts to the end of the payroll tax holiday, and he's going to adjust to it. he must make it clear, though, that he's not being profligate with all this bond buying, he is just simply trying to help keep interest rates down. until employment picks up. he has to revert to and reiterate his stated mantra about unemployment. i've got to tell you something. this is a tightrope walk worthy of the wallenda family. i think he can pull it off. that said, if bernanke somehow gets it wrong, if he falls either to the side of things are better than you think and therefore seems tone deaf to the newfound weakness in the economy, including another leg down in europe and a possible pause in the great chinese
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comeback, or if he says things are gotten so terrible that he's got to buy even more bonds, something that drives the conservatives crazy, then look for more days like wednesday and thursday. no matter what we get from all of these earnings. if we didn't have the testimony, then we would be spending the whole week parsing the language of retail as a whole host of them are reporting. for example, is the bullish home repair theme still intact? the one i keep talking about on the show. how about we give a listen to lowe's on monday? and home depot on tuesday. both of these companies have been soaring on the thesis that with housing roaring back people need either to fix up their old house in order to sell it or fix up their new house to improve it. the thesis is it's finally worth it to put money into improving your home because with home prices rising, and they are from the numbers we saw earlier this week, you can get your money back and then some. just like the old days. we'll pay extra special attention to home depot as a
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barometer because it has faithfully told us what percentage of the household dollar it thinks is being spent on home improvement. so far there's been no real surge, even though home depot's stock has surged, but that could be changing. and changing just when the analysts are getting really skittish about housing. remember the downgrade about home depot? i do it in my charitable trust. mostly because of what seemed to be an errant report from toll brothers earlier this week, an earnings miss that in reality was anything but. if we didn't have bernanke talking i would tell you all i really care about are the reports out of lowe's and home depot because the improving domestic housing market immune from old worries out of europe and china has been my number one thesis for about a year on "mad money" and it has produced some of the most bountiful gains of any theme i have ever exploited. we know that the less well off are being hurt by what i call the script, and the script is higher gasoline prices, prices by the way that i think are caused in part by speculative hoarding, and the end of the payroll tax break. we heard that from walmart and from darden this week, even as
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the stocks of the largest retailer in the world and the parent of red lobster, olive garden, and lone star steak, actually rallied on the news. maybe it's not even news anymore. by the way, we'll hear more from darden on monday at an analysts' meeting and perhaps they will lay out a strategy to deal with the weakness and talk about how the outsized dividend, which yields 4.3% here, is still very secure. then look, that rally today's got to be based on something. the stock could be down a buck. how about saks? i regard saks as part of what i call the gatsby cohort. like michael kors, which hit a 52-week high before it was bombed by a secondary offering or coach, which hit a 52-week low, possibly because it is now fashion backward. my daughter has a vintage coach handbag and i know it's the envy of anyone she sees who has a current coach. which of these high-end retailers is telling the truth? is the fall in the stars if saks give us an astrono, ma'amic view? or in themselves as i think it is with coach. to mix the far superior shakespeare with mediocre
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fitzgerald. by the way, i'm not a steinbeck fan either while we're calling him out. more of a stephen king aficionado. to stick with the retail theme we also hear from auto zone. all right? and people have been falling out of the zone of late with the good folks at stifel nicolaus making an incredibly bold call today that azo will muff the corner. that would be a serious blow to the auto improvement thesis that's been such a great one. we need the zone to sate opposite, that the car market is strong, and the same way we need to hear the despot say the housing continues to hum. wednesday. how about dollar tree? which last time made me feel like the story's become more like a half dollar bush than a dollar tree. [ rimshot ] and groupon, the online coupon that's been such a rage and a flame-out now seems to be clawing its way out of the cellar. these two will give us a low-end read and i read on the valueshop shopper. i think groupon will report a better quarter than people are expecting. thursday's best buy. suddenly people warming up to best buy.
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betting things have gotten so good it could potentially be the target of a potential leveraged buyout by its founder. i think the company's viable instead of being what some call an amazon showroom. either way we want to know about the kurms discretionary spending post-higher gas prices as well as the end of the payroll tax holiday and since everything at best buy's discretionary i think they're going to give us a good read. we have to listen to kohl's, which you know is where i get my socks. even if they don't have the best stock. they do have the best socks. now, we know that like best buy there are rumors of a leveraged buyout coming here too. frankly i don't care, i don't believe it and i don't want to get sucked in by it. however, i want the read on the consumer for certain. finally we get the most controversial retail name of all. deckers. ugg. i've been saying the worst might be over for uggs. or that vf corp. should buy deckers to revitalize them. the stock's pulds back from 44 to 40. big inventory build of the once red hot boots. i like it in the mid 30s.
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right now it's in no man's land but i still believe the stock could be -- barrage. let's watch how can depressed the consumer might be by reading the michigan sentiment survey on friday. listen, if everyone's bummed we'll sure hear about it from that report and the market will drop. what else matters next week? we've been keen on hertz. and i bet that monday morning's report can give you a signal about how strong this car market is courtesy of sandy's destruction of more than 200,000 cars plus the concentration of rental car companies at the pro trust portion of the justice department -- i meant antitrust. did i say pro trust? has blessed. the cell phone tower stocks. bunch of dogs. they've been in a world of hurt. okay? the best one, american tower, reports next tuesday. it con it could end the downturn with a blowout and good guidance. i bet we get it. next up joy global reports wednesday. he with need a fresh read from china. the ceo called the bottom right here on the show last year. but now a word again, can he
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reinforce there's a real turn in china? knows because he makes coal mining equipment, chinese use a ton of coal for electricity, xwichb the weakness of copper, the other measure of china's health, we need to hear that in the words of cramer non-fave chairman mao there is no backsliding. next week you need to focus on ben bernanke's tightrope walking senate techtd tuesday morning and the torrent of retail earnings. but make no mistake, bernanke's testimony will define the week, as i will explain when i'm on "meet the press" this sunday morning. joey in florida. joey. >> caller: boo-yah, jim. >> boo-yah, sunshine. what's up? >> caller: hey, what is your take on the massive drop in ver iphone? they reported an early miss on earnings and have an average purchase price of $19.25. >> we have not liked verphone i don't know, how many -- maybe since like the show started. so i'm not going to deviate now that it's had still one more disappointment. ixnay on verifone-nay to be very
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formal about it. nassar in maryland. >> caller: how are you doing? >> how about you, partner? >> caller: about six months ago i bought shares in tesla motors. and recently it's taken a big hit. >> yeah. >> caller: and my question is do you think i should stick with it or just bail out altogether? >> this is a tough call because it's really what i call a hope stock. and i think hope should be left in the stadium, the ballpark. but that said, you do have probably -- highly doubtful unless you bought it in the last three points. you've got a nice gain. so let's do this. cut it in half. play the rest with the house's money. jim in georgia, please. jim. >> caller: how are you doing, cramer? >> not bad. how about you, chief? >> caller: fine. >> good. >> caller: i want to ask you a question about zinga. i wanted to know what you think about it now that nevada has legalized online gambling. >> az said to the people on the set at "squawk on the street" today, zynga, i think it has -- oh, boy, you never want to use this word in relation to zynga.
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i'm trying to parse it out. ger und? what is that thing you do when you have to take sentences -- i think it's bottomed. it's all eyes on ben bernanke next week and all eyes on me and david gregory and maria bart rome o. an sunday on "meet the press." i want you to tune in to the fed report but when the fed chief talks the market is going to be listening. make sure you are too. "mad money" will be right back. >> coming up, sell your losers? why don't you blow out some of your stocks that aren't working? hold on. you'll want to hear what cramer has to say next. and later, house wawarming spec. cramer's gone house hunting. tonight he's on the prowl for an under the radar spec that could soon soar. could it be the insurance your portfolio needs? find out if it's time to move in. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer.
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#madtweets. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪ [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. this is the pursuit of perfection. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million
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standard at citibank. sometimes the forgiveness of this market just astounds me. ♪ hallelujah take hewlett-packard, this formerly great tech company reported a pretty miserable quarter last night. it just wasn't so miserable as to drive the stock lower and the market turned the other cheek and bid the stock up $2.10 today. hpq really took off after my buddy david faber grilled the ceo meg whitman and she acquitted herself right in front of our eyes very well making me and no doubt you feel that she should be bet with and not against as she tries to turn around this american icon of a tech company, which did see its stock fall more than 40% last year. i bet the stock of johnson & johnson? company dlufrz a subpar quarter and continues to get lots of love from wall street including me. remember i liked that new ceo so
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much. but i did think for sure that when j&j disclosed not one but two government probes into possible false claims related to hip devices and surgical mats sxkz they just did this, i thought the stock would be hammered. instead this company which seems to be in the recall business barely skipped a beat and is down less than a -- i mean, i've got to tell you, talk about bulletproof. j&j is about as bulletproof as they come. down a penny in the last trade. one more hideous article today calling the very fabric of the company into question. it was like wow, boeing, what a bunch of bozos. but the stock is roaring back. it's up the third straight day. it's a dow jones leader. get this. boeing, boeing is less than a buck and a half from its highs, for heaven's sake. how can this be? because the market is totally foofshing. this move up in the face of the dreamliner's woes is frankly nothing short of astounding and has to be recognized as a sign of innate strength even as that strength was completely ignored during the panic that was the mid-week sell-off on high volume. this market's willing to
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overlook so many flaws and so many flaws. how about norfolk southern? nsc? this stock's been pummeled for its exposure to coal for ages and ages. i mean, talk about off the rails! three months ago when the stock was at 56 norfolk southern told us the worst was over with coal. the old market, the bad one, simply wouldn't have believed a word this company said. but in the new market this stock has now rallied to almost 73. not only is the market forgiving, it's got a bad case of amnesia as this isn't the first coal bottom norfolk southern has called. but this time the market has suspended its skepticism and given the company the benefit of the doubt. >> all aboard. >> that's not unlike federal express which not that long ago told you it would miss expectations and the stock dropped to the low 80s. it's now up to 105. pretty much a straight shot higher. since management told you that tale of woe.
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that's how badly people want to own this play on a resurgent u.s. economy. all right. i mean, unless you criticize me on this. not everyone's getting the benefit of the doubt. right now the gang at apple is being viewed about as cool as the bell bottom-wearing drones at microsoft. in fact, the stock's actually cheaper than microsoft. and get this, it's being sued by a large shareholder for not creasing enough value, even as it's been about the world's biggest value creator of all time. suddenly the street's turned on whole foods, a former darling, and it likes safeway of all things. proving there truly is no accounting for taste. and i have no idea what's happened for coach to get its mojo back but i've been thinking, maybe it needs to get into bowling bags! but the overall theme is clear. if you screw up and confess culpability while laying out a course of action you're going to be richly rewarded for it in this environment. sought bottom line is don't be so quick to blow out of a
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non-performer. it just might come roaring back without you. stay with cramer. >> coming up, housewarming spec. cramer's gone house-hunting. tonight he's on the prowl for an under the radar spec that could soon soar. could to be the insurance your portfolio needs? find out if it's time to move in. how do you keep an older car running like new? you ask a ford customer. when they tell you that you need your oil changed you got to bring it in. if your tires need to be rotated, you have to get that done as well. jackie, tell me why somebody should bring they're car here to the ford dealership for service
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instead of any one of those other places out there. they are going to take care of my car because this is where it came from. price is right no problem, they make you feel like you're a family. get a synthetic blend oil change, tire rotation and much more, $29.95 after $10.00 rebate. if you take care of your car your car will take care of you. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex. a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money.
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i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. [ monitor beeping ] let's move on. [ male announcer ] find out what a hospital stay could really cost you at aflac.com. [ male announcer ] fintoday is gonna be anl stay important day for us.u you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. answers.
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if the housing market is coming back, then you know that i think that the housing theme cannot be denied. despite the doubts that cropped up mid-week about this sector. and if the banks are making more loans, and you know i think that can't be denied, specifically residential mortgage loans, another one of my favorite themes for 2013, which i did not abandon during the week, then how about we talk about a crazy idea for speculation friday? how crazy? you know what? i think this housing rebound is so robust that it's time to consider buying a mortgage insurer. albeit only for speculation. this is speculation friday. and the one i've got my eye on is -- radian group. rdn for all you home gamers. the stock i told you years ago you had to get out no matter what. the mortgage insurance companies, as you might expect from the name, write insurance policies on mortgages that compensate lenders or investors
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if the borrowers default on the loan. so let's say you take out a loan to buy a house and put down 15%. the bank is required to go to the federal housing administration or a private player like radian for mortgage insurance. the cost of which is then passed along to you, the buyer of the house. anytime the down payment on a mortgage is less than 20% the regulators pretty much require that the bank get mortgage insurance. i know. bothered me. probably bugs you. but during the financial crisis and the recession the mortgage insurers were some of the biggest losers out there because they had to pay endless claims. endless amounts of claims. as millions of people defaulted on their mortgages. the losses were so bad and the pain so constant -- >> the house of pain. >> -- that pmi, one of the largest players in the industry, often considered to be the premier player, declared bankruptcy in 2011 and for years investors have been worried, justifiably, about the solvency of everybody else in this industry. which brings me back to radian.
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ten months ago there were genuine questions about the company's solvency itself and the stock traded at just two bucks and change. since then radian's been rallying like mad and we'd be nuts toying nor it. the stock is now at $7.95. i know. it sounds like a small dollar amount, but you know this is up 250% in less than a year. 250%. in fact, it's almost doubled in the last three months alone. but the mortgage insurers were so toxic that for so long that i'm sure many of you want to write radian off as simply too dangerous. when i first looked at this idea, i said, what aim -- i saw the percentage. i figured i've got to check this thing out. sure enough, don't write this off, don't do that. the mortgage insurance business was in trouble for years. for the very same reason it's coming back with a vengeance right about now. housing. when the housing market was in freefall. when no one was buying new homes and foreclosures were rampant and everywhere, the mortgage insurance stocks got absolutely killed. this entire industry was left for dead. but you know what? we knew it couldn't stay that
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way forever. now that the housing market has come roaring back the mortgage insurers that survived like radian have come right back with it. no longer walking dead anymore. okay? i know. new season. whatever. in fact, radian used the slump to make itself stronger. just a few years ago radian was the number three player in market share in the private mortgage insurance business. now it's number one. the company wrote 37 billion, that's with a b, in new insurance in 2012, up 139% from the year before and wrote $4 billion in new insurance last year alone. it might seem crazy to recognize a mortgage insurer but when you look at the fundamentals it makes a lot of sense and you know radian's business is only going to improve as the houging market continues to pick up steam. there's another way in which radian has benefited from the aftermath of the financial crisis as banks have tightened up their lending standards. it's much harder to get a mortgage these days and that means the policies radian has been writing for the last three years is much less likely to blow up in their faces. and they've been incredibly
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aggressive in pursuing this profitable new business. right now 45% of radian's risk in force and that's the key metric that measures their maximum exposure to credit risk at any point in time comes from new insurance written after 2009. these r9 safe mortgages to high-quality borrowers. by the end of this year, the post-2009 business will represent nearly 75% because they're writing so much new business now. plus there's another component to this story. this will knock your socks off. the fha, the federal housing administrator, which is radian's largest xeers with about 15.8% of the total insurance market, get this. the fha isn't a business. it's a government agency. and right now its capital position is well below the congressionally mandated minimum. that's why the fha has had to raise prices on its mortgage insurance five times in the last 18 months and it's likely more price hikes will follow as this year unfolds. the fha has come out and said its market share will revert to the historical norm of somewhere around 8% to 10%. your competitor's saying it's not going to be as aggressive.
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that lost market share needs to go somewhere and a lot of it will flow to radian. talk about friendly competition i love this angle. for years radian's been winding down its financial grarnt business where they wrote insurance for everything from municipal bonds, complex structured products -- i mean, they stopped writing new policies in 2008 and reduced their exposure by 61% over the last three years. on top of that some 35% of radian's exposure to cdos, remember those horrible things, mature at the end of this year. the bears are still very much out in force with radian and there are a bunch of short sellers betting against the company as 25% of float has been sold short. a huge amount. back in november "barron's" ran a very negative article accusing radian of being, and i quote, a house of cards. and i don't think they're referring to the fabulousar netflix series with kevin spacey. "barron's" was alleging they underreserved capital for the policies they wrote and overdenying claims. but the regulators have approved the way radian's using its capital.
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it's following the standard industry practice of denying anything where the paperwork is wrong. i think the bears will be proven wrong. radian's management has said that the company will return to profitability in 2013, possibly as early as this quarter. this is the inflection point, people, and it's why i'm going tone doris this stock even if i've hate td for 34u89 ip'll years and even after its enormous move and i don't deny it's had ab enormous stock. it's almost an $8 stock but it has a book value of 14 when you include the company's deferred tax assets. to me it sounds like a steal. i'm not the only one. susquehanna, a real good brokerage firm, they do good research, just upgraded the stock earlier this week and gave it a $14 price target. here's the bottom line. yes, the mortgage insurers were toxic when housing was toxic. but now that housing's terrific again, radian has a chance to be radiant too. which is why i think it's worth buying as a speculative and admittedly totally contrarian way to play the house rebound. gary in new york. gary. >> caller: hey, jim. thanks for taking my call mip son shawn's getting bar
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mitzvahed april 6th and he wants to invest some of that bar mitzvah money. he likes esi. i said let's ask cramer. what do you think? >> first of all, mazel tov. let me see. we like so many parts of the itt, but that's not my part that i like. i don't want you to be in that. i think -- look, i'm going to revert to tried and true here, man. i'm going to revert to a disney, to a mcdonald's. i want some long-term thinking here, something that he would be familiar with and can stay in touch with. let's do a disney, let's do a mcdonald's. that's what i feel more comfortable with. let's go to larry in georgia. larry. >> caller: dr. cramer, thanks for all the help you give us. >> my pleasure. >> caller: my stock is sanchez energy. and after gathering all the information i can find on the company, i don't think i've ever seen another company with so many bullish factors working for it but trading at only 12 times the current year's estimated earnings per share. am i overlooking a weakness in the company or is it just not discovered yet? >> well, i always -- i was
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talking to nicole urkin, my associate today, and also yossi, a tech guy that i deal with at street. and he said how do you know all the stocks? i said, i don't know all the stocks. you just hit another one i don't know. i do not know sanchez energy and i've got to look that up too. better than saying i really like it, sounds like it's got a lot of oil and gas. because that would reveal me as someone who i'm not, which is a jeker. i've got to come back on it. housing is bouncing back and i think the mortgage insurers deserve a second chance, and that is why i'd like you to look at the speculative name that is radian. a stock that i despised for years and now i have to admit is coming back with a vengeance. don't move. "lightning round's" next. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking,
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i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. ♪
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it is time. it is time for the "lightning round" on cramer's "mad money." rapid-fire calls one ever the other. you say the name of the stock i tell you whether to buy buy buy or sell sell. my staff prepares the graphics on the fly. play until you hear this sound. [ buzzer ] and the "lightning round" is over. are you ready, skee-daddy? time for the "lightning round" on cramer's "mad money."
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carl. >> caller: how's it going? >> i'm real good. how are you, karl? >> caller: i'm doing real well. i want a shout out boo-yah from baltimore, maryland for you. >> i like that. i like the ravens too. what's up? >> caller: thank you. i'm a first-time caller. i own some verizon and they did the dividend reinvestment and they gave me this other company ftr -- >> no. verizon is so good. don't even use frontier in the same sentence as verizon. you don't want to touch frontier. i just think you've got to stick with the ones that are conservative with good yields. let's go to beth in georgia. beth. >> caller: hey, jim, how are you? >> how are you? >> caller: thanks for taking my call. i'm talking about vnc. vernetix. >> does have a lawsuit with apple. won some from microsoft. if you want to play it play it with calls. it is speculative but they have a lot of upside if they hit the jackpot. how about chris in illinois? >> caller: boo-yah from snowy and cold chicago, mr. cramer. >> yeah, i understand.
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i hope it doesn't come our way too quickly. what's up? >> caller: tell me your thoughts on vonage holdings. vc. >> we had a caller ask about another phone company. i'm going to send you to verizon. i don't want to mess around with the little guys. might get a little speculative action but it's not for me. josephine in connecticut. joeftine. >> caller: hi, jim, i want to thank you for teaching us how to make money in the stock market. doing my best. what's um? >> caller: my stock is centurylink. what's going on? >> they already cut the dividend. i don't know how much more they can do. but once again it reminds you why verizon and att are the jewels of this industry. let's go to dan in florida. dan. >> caller: hey, mr. jim, how are you? two real quick questions. what are your thoughts on permian basin trust? and also if you can explain a little better what you said last week about the preference between lynn energy and lynn co? >> let me just quickly do that. your 401(k), your ira, you can't own certain kinds of ml -- you
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can't own nlps without running the risk of possibly incurring a tax. that's yuck own nlco, which is the company they set up in order to be able to avoid that tax. and i do think you should. i really like that acquisition of berry petroleum and don't like the accusations that were in the press about lynn management, which i think is terrific. as far as permian basin, i don't know. these have been cutting their yields. why do i want to be in a yield cutter when i can be in a yield booster? that's lynn. lynn co. let's go to greg in new jersey. greg. >> caller: hey, jim, thanks for taking my call. just wanted to get your perspective on a business partner you that brought up with isis and wanted to know the other side of that, which is alny. >> yeah, we've looked at that. you know, it's an interesting -- speculative friday. i bless it. but i'll talk about the idea of the one i like. biomarin. great number. that's my spec in the group and i reiterate that's my fave. need to go to rob in pen.
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rob. >> caller: jimmy. boo-yah to ya from glenside, pa. >> glenside. around the corner. what's happening? >> caller: hey, jimmy, was just wondering about aqua america. the old suburban water company. >> you bet. that was my water company when we never had to drink bottled water because their water's better than bottled water np none of that plastic. it's come alive after being dormant for a very long time and i have to admit it's starting to roll up. i'm on board. call me a momentum player. i will take the blame. let's go to richard in colorado. richard. >> caller: hey, jim. a single-digit mining stock. does it still have a call? molly corp. >> i've been against that stock from time immemorial. you can say hey, jim, at this level it's a buy. i've got to have a reason to buy it other than the fact it's probably too heavily shorted. let's go to nikki in florida. >> caller: hey, mr. jim cramer. it's a pleasure to have the opportunity to speak with you. >> same.
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>> caller: my question is bac. bank of america. >> yeah. now, bank of america is kind of classic of what i saw this week. when everyone was panicking out of stocks, bank of america that lose 40 yents, that was a sign to me fwhank america and the whole banking group is worth owning. bank of america is good. i like the banking stocks very, very much. and i'm not changing my mind now. even know there's bells telling you listen, time to go in the cash, sell everything. i heard it all this week. i think most of it is wrong. it's just mixed signals. and i like the banks. steve in connecticut. >> caller: yes, jim, thank you for taking my call. >> my pleasure. >> caller: my stock is phototronics. they make photo maxz for semiconductors and -- >> right. there i prefer lamb research. actionalertsplus.com, we own that. stephanie link, co-portfolio manager. why? we do like the semiconductor equipment stocks. yours is good.
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mine is less speculative. big buyback. that ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. holes. >> look, i like to shop at kohl's. i go through shirts constantly because of that pancake memory they've got -- you thought i look this good naturally? >> someone tweeted @jimcramer and said i look sick today. it buoys my thinking. by the way, it's my go-to place for socks. >> wow! >> if there's a shot here where i'm going to show my socks. okay? >> i'd rather buy the socks at kohl's then by the stocks of kohl's. >> frank. >> pepsico, or do you buy the coca-cola corporation? let's have a taste test between pepsico snacks and coca-cola snacks. not fair. cool ranch.
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this is the real definitive test. okay? pepsico. definitely better. >> this week in the internet. after capturing the world's imagination, "mad money" presents its rendition of the harlem shake. ♪ ♪ and do the harlem shake ♪ ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ]
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on our internet, phone charges and cable, plus at office supply stores. rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight? or maybe, it's all of the above. and all the rest. am i home? nope. but it almost feels that way. homewood suites by hilton. be at home. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million
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daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. before we get to "mad mail," it's time to karch on our homework. on january 24th tyler from iowa called us about inconvenientsense, invn. i said it was a great stock, i needed to do more work on it.
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this is a fabulous semiconductor company focused on its proprietary motion processor platform. technology embedded in chips that allows computers toto track human motion for everything from smartphones to gaming devices to video cameras. back in november i told you to stay away from this one for a number of reasons. they had just lowered guidance. and the departure of the ceo all of a sudden worried me. but you know, i've got to admit i'm big enough and when i'm wrong i was really wrong on this. invensense has rallied 35% since i told to you avoid it. i was way too conservative on those two red flags. and you know what? with red flags you are going to miss some good ones in order to avoid some bad ones. okay. so what's next for this company? the company samsung business looks stronger than expected. and despite the run the stock is still trading at a dis count to its long-term growth rate. my view, i still regard it as speculative. so if you own it, i would ring the register on some and just play with the house's money. at least until the gross margins start to improve. but i got it wrong. i was too, too worried that it could blow up. again. on that same night we got a
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terrific question from david in virginia on computer sciences, csc. david liked the last quarter, the guidance and the new ceo. so i decided to teak a closer look into this name, which i always viewed as falling into the always a bridesmaid, never a bride category because it was always rumored to being acquired. as many of you know csc is a global information technology services firm. these guys have been in serious divestiture mode and they are turning the ship around with new management which we like very much. feels like sman teb to me. csc has exposure to u.s. government spending in europe, two areas that are not looking so hot to me. dell has to too and dell decided to go private. but the stock csc has run up 18 for the year. so david, you felt like you m s missed it and you didn't. at these levels i'd take some profits and see how the management does in 2013. thank you for bringing this to our attention. again, you were late. nicholas from florida asked me about bloomen brands, blmn. i told him i wanted to compare it to the other small restaurant chains of how they're dealing
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with commodity costs before opining about the stock. bloomen is the company behind outback steakhouse, crabba's italian grill and bone fish grill, roy ws a total of more than 1,400 restaurant they either own or franchise. the average check at these places just over 20 bucks. so while it's not what you call fancy, bloom zen still at the higher end of the casual dining space versus, say, olive garden or red lobster. he with like the company's been able to meet expectations and it's been on a huge run since ipo, up 56% since then. today reported another strong quarter with erin earnings per share better than a penny better than expected. and outback steakhouse performed very well. but the stock sold off 5% because the company saw commodity inflation in the quarter. i think bloomen remains risky as higher gas prices and the end of the payroll tax holiday put the squeeze on the consumer at thaend at the same time as we fear higher commodity sti costs. stock trades at a discount but it feels -- like when you eat unwould've those blooming onions. i like outback steakhouse. i think shu wait for a pullback
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under 16 a bit more than a buck below where it is now before pulling the trigger but if it got there unlike so many people who say wait for a pullback and then when it pulls back they run, i want you to buy it. i have some tweets here. mad tweets. and yeah, look, i still answer as many as i can. you go there you see all those followers, i'm always trying. sometimes i favorite people. my daughter told me how to favorite people. our first tweet comes from @stevespraycal. his tweet says, "jim bo, i bet you didn't know you that and i are going to the asu and washington game on saturday. go devils." well, you know what? i like the sun devils. so i'm glad that i'm there. i was actually thinking about doing something else, like "meet the press" on sunday, but you know what? if i'm on the devils game saturday and "meet the press" sunday, i'm on a plane a lot. our next tweet is fro from @bsimmss857. which is infathomable to me. "jci is today the day to buy to
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lower my average cost." i don't like people buying to lower average cost. hfac is coming back and that's a primary business for them. how about one from @kalenmurray? thoughts on vmware, vmw with a pullback we've seen? no. i didn't like that last quarter and i'm tired of the big data theme for the moment. too many companies want to be in big data. just go read the hewlett-packard conference call and you know exactly what i mean. "mad money's" back after the break. coming up, warehouse sale? with fedex as its biggest client and an industrial-sized dividend, could this reit provide you shelter? don't miss cramer's exclusive with the ceo of monmouth real estate investment corp. this is america.
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jim cramer. you're one of my heroes. >> i look forward to your show every weeknight. >> thank you so much for helping beginning investors like me. >> when you talk about the market, i just believe that you're spot on. >> oh, i love it. thank you so much. every night we watch you, i have learned and earned. we spend a lot of time on the show talking about the rebound in residential real estate but tonight i want to talk to you about the recovery in industrial real estate, which is picking up all over the country. specifically i want to take a closer look at monmouth real estate investment. that's mnmr.
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speculative because it's small real estate investment trust. it sports a bountiful 5.6% yield. monmouth owns 73 industrial properties and one shopping center and they're in the business of leasing these properties to single tenants for long periods of time. now, i've been hesitant to recommend this stock, close watchers know, because one tenant, fedex, takes up 41% of monmouth's square footage and we don't like that kind of customer concentration. but on the other hand the company just reported back on february 7th and the results were strong. with funds from operations coming in at 18 cents. three-cent beat. monmouth's occupancy rate, wow, the ratio's 94%. plus this company, and this is the most important thing, has massively outperformed the major indices giving you total returns of 50%, 103% and 200% over the last one, three, and ten years. not a bad move from a company you might not have heard of. even if you don't want toent stock this is a company that can can give us a read on the health of the xhern american economy. let's check, in new guest, michael landy, the chief operating officer of monmouth real estate investment corp., to find out more about the quarter and where the company's headed. mr. landy, welcome to "mad
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money." have a seat, sir. >> thank you, jim. a pleasure. >> now, i mentioned that you had a concentration of clients. that comes from my frequent guest don wood and from steve tanger, from federal realty and from tanger factory, saying listen, you never want too much concentration. but why don't you tell us why in this particular case it's a good thing. >> well week, big fans of federal realty. and tanger. the difference is our focus has always been a qualitative one. so our business model is to look only at investment-grade tenants. so if you're looking at the whole credit spectrum from a to z, in order to mitigate the risk of certain tenants not being able to pay rent, you're going to want to have broad diversification. because we cast this finite, very focused narrow net strictly on the investment grade universe, we have an all-star roster of tenants. our tenant base is coca-cola, anheuser-busch, kellogg's, caterpillar, united
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technologies, siemens, national oil well, sherwin williams, and as you mentioned our largest tenant is fedex. >> what happens if fedex gets upset with you? what happens if fedex has a bad experience with you? >> our history with fedex goes back 20 years now. and we've seen time and again what a remarkable organization fedex is. they don't get mad at us. we're great landlords. we have a solid relationship. solid long-term relationship. and we work well together. they renew leases. they're still in the first building we leased to them 20 years ago. our relationship with fedex is such that i don't see -- each lease is a separate lease. there's not a master lease. and i don't see it as a weakness. it's very advantageous to have such a strong tenant. >> and in this particular case you present in your terrific annual report and also in the q
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& a on the conference call that you're an internet play, the only brick and mortar one that is an internet. because when fedex ships more internet stuff you guys get more business. >> right. well, there's been this technological revolution going on. and retail spending, consumer spending is 2/3 of our national economy. it's the driving force. and suddenly there's this great migration from main street to cyberspace. and it's good for the whole industrial property type because these goods have to be warehoused. so it's doubly good for monmouth and fedex because they have to be shipped. and what we're seeing with fedex is fedex ground has grown 50% over the last five years. retail spending on the internet is outgraeg brick and mortar reeltding by a 3/1 ratio. growing by 50-15% versus 5%. it's still only 10% of total retail spending. so it's very much in its infancy. tremendous room for growth.
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we see e-commerce as a long-term game-changing event. so it's probably the reason -- it's definitely the reason why they're expanding buildings and why they're one of the few companies growing and building new buildings. >> your company did not cut its dividend, your payout during the downturn. it's been really steady and good. do you think it is possible that sometime in the next year you'll actually be able to bump your dividend higher? >> well, backing up to what you said, because it's pretty significant, deep and protracted recession was a major stress test. and most companies' dividends were not able to maintain throughout the downturn. because of our tenant base, because we have long-term leases to the coca-colas and anheuser-busch and fedex, et cetera, if you looked at our financials you'd see no sign of a economic downturn. so occupancy was 95% to 98% throughout. our earnings were sustained throughout. and they were strong and our dividend was maintained.
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now, as far as your question, raising the dividend, you know, we're already yielding about 250 basis points more than the average read. >> that's because they all went up a lot. yours has too. but i just thought this is a possibility. can we give it -- that was a possibility? >> we do have the deals in the pipeline to generate accretion. and so as we get our ffo payout ratio lower he, as with get our f foch ffo payout to the point where there's substantial free cash after the dividend, we can get to raising our dividend. i don't see that in the near term. >> fair enough. you're a straight shooter. michael landy. c.o.o. of monmouth real estate investment corps, mnr. it's been a terrific outperformer. you've heard the story. stay with cramer. >> stay connected to cramer on madmoney.cnbc.com. all stations come over to mission a for a final go.
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